KUALA LUMPUR- Malaysian palm oil futures fell as much 3.3% on Wednesday to close at their lowest level in more than two months, as concerns over dismal Jan. 1-20 exports data offset support from supply disruptions due to floods.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange fell 42 ringgit, or 1.3%, to 3,225 ringgit ($797.67) a tonne, its lowest closing since Nov. 9.
Exports of Malaysian palm oil products for Jan. 1-20 fell 43% from the same period in December, as biggest buyer curbed purchases of the edible oil, cargo surveyors said. Exports during Jan. 1-15 had also declined around 42%.
Contracting demand outweighed fears of supply disruption as flooding in several parts of Malaysia hurt output.
The high rainfall is delaying harvesting in flooded areas, jeopardizing the road conditions and affecting evacuation, a Sarawak-based plantation manager said.
The market will now wait for more export and production outlook to reinforce sentiment for January end-palm oil inventories in Malaysia, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
"Focus will also be on Indonesia Feb. palm oil export levies and export duty announcement; at present it is expected to increase to $255 and $93 per tonne respectively, totalling $348 per tonne, in comparison to $72 per tonne export tax from Malaysia," Bagani said.
Higher export taxes in Indonesia would benefit cheaper Malaysian palm oil exports.
Dalian's most-active soyoil contract fell 2%, while its palm oil contract slipped 3%. Soyoil prices on the Chicago Board of Trade were down 0.3%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
($1 = 4.0430 ringgit)
(Reporting by Mei Mei Chu; Editing by Shailesh Kuber and Rashmi Aich) ((Meifong.chu@thomsonreuters.com))
